Interim Results

Pan Andean Resources PLC
20 December 2001



                           PAN ANDEAN RESOURCES PLC

           INTERIM STATEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2001



Chairman's Statement


This is a time of great uncertainty for small oil and gas producers. The price
of gas in the US has fallen by 70 per cent from the highs of late 2000, due in
part to the world economic slowdown. The lower prices impact on the economics
of our Bolivian oil and gas production as well as on our El Dorado gas
discovery. The effect on Pan Andean is severe. What could have been a good
profit if prices had held up, has fallen to a loss of £108,000. We continue to
generate cash but at a much reduced level, existing debt of $200,000 USD will
be cleared within two months.


Commenting at the end of December 2001, it is difficult to be optimistic about
the coming year. I am not convinced that the world economy will rebound in mid
2002. All commodities are at depressingly low prices, which suggests that
world demand is very weak. This means poor profits for most hydrocarbon
companies this year and next year. When you factor in the unknowns created by
the current turmoil in the Middle East, then a longer recession looks
possible. So much for the macro picture. Let me now turn to the activities of
your company,


We have three strands of activity:


  *  Oil and gas production mainly from three platforms in the Gulf of
     Mexico,
  *  Oil and gas production from the Monteagudo field in southern Bolivia,
  *  Participation in a significant gas discovery, El Dorado, in
     central Bolivia.


Our US operations, despite falling prices have done well. Oil production from
our 62.91 percent owned High Island 30 block remains strong. The 2001 Gryphon
discovery on the High Island 52 block is producing 20 million cubic feet of
gas a day from one well. Our small royalty is earning over $20,000 a month.
More importantly, similar drilling targets close to Gryphon have been
identified. We currently have a 44.7 percent interest in these targets. One or
more wells are likely to be drilled next year. We intend to participate as
much as possible. Onshore Texas, the North Bob West gas field has been bought
by El Paso who have commenced a 20 hole drilling programme. Our one percent
royalty should increase in value as this field has very strong seismic data.


In Bolivia, the Monteagudo field continues to produce over 670 barrels of oil
a day though gas production has fallen to 2.7 mmcf a day. With our partners
Petrobras (20%) and Repsol (50%) we are examining ways to improve the
efficiency of operations.


The main focus of activity in Bolivia, has been and remains, the
commercialization of the El Dorado gas field. This field, centrally located
beside the Bolivia-Brazil pipeline has over 250 billion cubic feet of gas in
estimated reserves as well as drilling potential at depth. We have been
working on a programme to increase our interest in the field to 30%, while at
the same time negotiating a life of field supply contract with Petrobras.
Negotiations are frustratingly close to a conclusion but wider political and
economic issues have intruded. The supply and pricing of Bolivian gas to
Brazil is of national importance to each country. We are attempting to weave
our way through the complexity stressing the locational advantages and speed
of supply available in El Dorado.


Future Strategy


The development of El Dorado would transform the company. I am confident that
a solution to the present problems will emerge.


Our US assets look good. I expect that two or three drilling prospects will
arise in the Gulf area in the first half of 2002.


The current political and economic chaos in parts of South America, while bad
for the region as a whole, may throw up opportunities to acquire producing
assets. Times of great uncertainty are also times of great opportunity.



UNAUDITED GROUP PROFIT AND LOSS
for the period ended 30 September 2001
                                                      Six Months Ended
                                            30 Sept. 2001         30 Sept. 2000
                                                    £'000                 £'000


Turnover                                            2,437                   931
Operating Costs                                   (2,492)                 (720)
Operating / (Loss) Profit                            (55)                   211
Interest Receivable                                     6                   111
Interest Payable                                     (59)                     -
(Loss) / Profit before Taxation                     (108)                   322
Taxation                                                -                   115
(Loss) / Profit for the period                      (108)                   207
(Loss) / Profit per share                          (.11p)                  .26p




UNAUDITED GROUP BALANCE SHEET
for the period ended 30 September 2001
                                                         Six Months Ended
                                                     30 Sept.        30 Sept.
                                                         2001            2000
                                                        £'000           £'000

Fixed Assets                                           13,337          15,720
Current Assets                                          2,540           2,319
Current Liabilities                                   (2,071)         (2,439)
Current Assets less current liabilities                   469           (120)
Creditors (amounts falling due after one              (1,072)           (323)
year)
Total Assets less Liabilities                          12,734          15,277
Share Capital and Reserves                             12,734          15,277



Copies of this announcement will be sent to shareholders and will be available
for inspection at the Company's registered office at 20-22 Bedford Row, London
WC1R 4JS.


Pan Andean Resources           162 Clontarf Road     Tel: [phone]
                               Dublin 3              Fax: [phone]
                                                     Email: [e-mail]
                                                     www.panandeanresources.com


Registrars & Transfer Office:  Computershare         Tel: [phone]
                               Heron House           Fax: [phone]
                               Corrig Road
                               Sandyford Ind. Estate
                               Dublin 18


Pan Andean is listed on AIM in London.